GGRP Targets 2021 Profit to Reach US$ 54 million
Jakarta, CNBC Indonesia - Steel issuer PT Gunung Raja Paksi Tbk (GGRP) is optimistic that it can achieve a net profit of US$ 54 million by the end of 2021. This optimism appears after the company sees improved performance throughout 2021.
Until the third quarter of 2021, Gunung Raja Paksi has increased its revenue by 7.5% year-on-year to US$ 502 million. At the same time, the company's gross profit increased 363% yoy to US$ 71 million, followed by an increase in EBITDA and net income of 235% yoy and 369% yoy, respectively.
"The Board of Directors is optimistic about the company's performance going forward. To close the 2021 book, we estimate a net profit of USD 54 million," said Gunung Raja Paksi President Director Abednedju Giovano Warani Sangkaeng in an official statement, Tuesday (14/12/2021).
Argo emphasized the company's commitment to maintaining and optimizing financial performance in other aspects. One of them, GGRP is determined to improve the capital structure, by reducing the debt to equity ratio. Until the third quarter of 2021, GGRP's debt to equity ratio fell to 0.46 times from the previous 0.51 times.
Gunung Raja Paksi also managed to improve interest coverage in line with the increase in EBITDA and the decrease in the company's net debt.
"This success is inseparable from the company's strategy. One of them is related to tight control over the purchase price of raw materials and the selling price of goods to ensure that all inventories sold produce good margins," he said.
In terms of operations, in the same period GGRP was able to produce 430 thousand tons of bulk steel (crude steel) or an increase of 27.7% on an annual basis. The company also recorded a decrease in production volume and sales volume on an annual basis of 12.7% and 26.2%, respectively.
"This decrease is related to the company's strategy to carry out tight and selective control over the determination of the purchase price of raw materials and the selling price of finished goods, in order to maximize profitability," he said.
On the same occasion, Gunung Raja Finance Director Paksi Harianto said the company is committed to continuing to take digital transformation steps. This has been realized through the implementation of the SAP ERP system and the signing of a collaboration with HR cloud based software, Darwinbox.
"In addition, GGRP also continues to contribute to the surrounding community, through the GRP Peduli program," said Harianto.
He said the company is optimistic about 2022, especially because of the high prediction of Indonesia's economic growth. In 2022, the IMF estimates that Indonesia's economic growth can reach 5.9% or exceed the estimated world economic growth of 4.9%.
It is believed that this economic growth will be supported by government spending plans and the growth of the infrastructure budget, plus a catalyst in the form of a project to move the country's capital city to Kalimantan.
"The company is optimistic about the prospects for the domestic steel industry due to China's steel production restrictions and the increase in world energy prices. We see this as an opportunity to become an export steel player," he said.
Director of Corporate Affairs Gunung Raja Paksi Fedaus explained that the company is committed to green initiatives or ESG and supports the government in realizing the Sustainable Development Goals. As a testament to this commitment, GGRP has become the first steel company in Indonesia to purchase quality carbon credits through Climate Impact X.
"The company also underlines several regulatory frameworks regarding the carbon market in Indonesia and urges the steel industry to explore technology and create a roadmap for the company's sustainability, to support the government's national action plan related to climate change," said Fedaus.
Meanwhile, Director of GGRP Biplab Kumar Dutta said the company uses four basic frameworks of action in carrying out its green and decarbonization strategy. The four things are optimization of core operations, reduce and recycle movement, acceleration of carbon reduction, and sustainable cooperation.
"GGRP also plans to operate a new Light Section Mill (NGO) plant in the first half of 2022, has used waste management facilities, and is committed to continuing to apply the best technology in its field," concluded Biplab.
(rah/rah)
Source: CNBCIndonesia